Key Highlights
Why is the recent price movement of Ethereum significant?
The recent $10 billion Open Interest purge for ETH triggered a reset in leverage and renewed accumulation by whales, suggesting a potential rebound.
How is BMNR impacting the market?
BMNR’s aggressive accumulation is serving as a significant catalyst, dispelling fear, sparking FOMO, and indicating a potential turning point.
Historically, when Ethereum experiences a more significant drop than Bitcoin, it tends to bounce back even stronger. In the recent scenario, ETH dropped by 18% between September 13th and 25th, while BTC only saw a 7% decline.
Two weeks later, ETH surged by 14% compared to BTC’s 10%. The Derivatives market played a crucial role in this trend.
This pattern continued recently, with Ethereum witnessing a $10 billion Open Interest (OI) wipeout, nearly double the deleveraging seen in Bitcoin.
In essence, significant OI movements directly impact Ethereum’s price action due to higher leverage, resulting in more substantial drawdowns, as seen after the recent crash where ETH dropped by 12.18% versus BTC’s 5.82%.
Source: TradingView (ETH/USDT)
Largest Open Interest Purge in History
In line with this, Ethereum recently witnessed its most extensive Open Interest (OI) purge to date.
Data from CryptoQuant indicated that on October 10th, within 24 hours of Trump imposing tariffs on China, ETH’s OI dropped from $28 billion to $19 billion, marking a record single-day decline.
Source: CryptoQuant
Typically, such purges take around two weeks, but ETH accomplished it in just one.
Although significant deleveraging occurred, analysts noted that it was “long overdue,” as it clears the path for smart money to enter and “buy the fear.”
BMNR Acquires Ethereum as Tom Lee Labels Dip a ‘Healthy Shakeout’
On that front, BitMine’s (BMNR) confidence in Ethereum remained unwavering.
Data from Lookonchain showed BMNR purchased 128,718 ETH for $480 million post the recent crash, establishing their average cost basis at $3,730 per ETH. This aligns with Tom Lee’s view of the pullback being a “buying opportunity.”
Clearly, BMNR is executing their strategy flawlessly.
The outcome? ETH surged by 2.27% intraday, recovering losses from the previous day, with buy orders accumulating as it retraced to levels seen in early August.
Source: TradingView (ETH/USDT)
In summary, Ethereum appears poised to repeat its historical trends.
Supporting this trend, the ETH/BTC ratio rose by 1.24% intraday, indicating ETH’s strength against BTC. This could be an early indication that the market is gearing up for a more robust rebound, with the OI purge reinforcing this movement.
In this context, BMNR’s conviction extends beyond absorbing pressure.
It serves as a crucial catalyst, reigniting FOMO and dispelling FUD, suggesting that ETH might be at a significant turning point for investors to monitor.
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The cat leaped onto the table and accidentally toppled a vase.